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    Question

    According to SEBI’s proposed rules for Real Estate

    Investment Trusts (REITs), what financial instrument can REITs use to hedge against interest rate fluctuations?
    A Equity derivatives Correct Answer Incorrect Answer
    B Commodities futures Correct Answer Incorrect Answer
    C Interest rate derivatives Correct Answer Incorrect Answer
    D Foreign exchange derivatives Correct Answer Incorrect Answer
    E Stock options Correct Answer Incorrect Answer

    Solution

    SEBI has proposed allowing REITs to use interest rate derivatives to hedge against fluctuations in interest rates, which helps REITs manage cash flow stability and reduce financial volatility.

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